Q. To preface, I am a twenty-something Defense Department civilian who will be furloughed the 11 days if Congress does not act. In June, I will have a $5,000 windfall from CD at maturity. I wanted to know the best possible option for this money. So far, I thought of fully funding my Roth IRA and saving the rest, adding to my emergency fund savings (which stands at about $25,000), funding my Thrift Savings Plan, or just investing in a taxable account (mutual fund, ETF, etc.) What do you recommend? A. Your question is like telling me that you’re flying an airplane…
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Q. I plan to take a $50,000 residential loan from my Thrift Savings Plan account. Am I limited to repaying $17,000 a year (the contribution amount), or could I pay back $25,000 a year from my salary? A. You may repay the loan as quickly as you like.
Q. I have an inherited IRA with $50,000 (from my 75-year-old father). It is in a managed asset account. I have to take a required minimum distribution on a yearly basis. Can I transfer this money into my Thrift Savings Plan account and request RMD on yearly basis? A. No.
Q. I was wondering if the federal government will match my Roth TSP contributions like they do the Traditional Thrift Savings Plan contributions? A. Yes, but the matching will go into your traditional TSP account.
Q. When I retire at age 57, can I withdraw a small portion of my Thrift Savings Plan, pay the 20 percent penalty and leave the remainder as set monthly payments with the tax as three dependents? A. If you retire at 57, you may take a partial withdrawal, if you haven’t already taken one, with no early withdrawal penalty. You may also take a full withdrawal as a series of monthly payments. Check the table on Page 3 of the notice at https://www.tsp.gov/PDF/formspubs/tsp-536.pdf for information on tax withholding requirements.
Q. I am a federal employee contributing to the Thrift Savings Plan. I have a traditional IRA, with a large brokerage firm, which I no longer contribute to. Would it make sense to transfer the IRA to TSP and possibly a Roth? A. The TSP is the best investment environment you’ll find, so you should maximize its use.
Q. My wife works for a dental office which has a profit-sharing plan. Only her employer makes contributions to this pretax plan. She will retire in one more year. We would like to do a direct rollover of her funds into my Thrift Savings Plan, so that all holdings can be distributed from this one account. However, I have been told by TSP personnel that the ownership of any plans to be transferred must be in my name, not my spouse’s name. Is there any legal way for getting her profit-sharing plan funds to transfer into my TSP account? For example, since I am 2½ years…
Q. I have a Thrift Savings Plan account, with about $35,000 in it. I need to make a down payment on a house I want to buy. I have already withdrawn $14,000 this year for other purposes. I probably will need to withdraw some more cash. What forms will I need to use? And what are the pros and cons of withdrawing this additional amount? A. You’ll find the forms you need at www.tsp.gov. The pros and cons of taking the money from the TSP will depend upon your circumstances.
Q. I’m 59 and retiring June 2, which is the first day of a new pay period. Will my Thrift Savings Plan election and catch-up contribution be deducted from my last paycheck? I will have earned no salary in that pay period, but I will have my lump-sum annual leave payout. A. TSP deferrals are not taken from annual leave payout checks.
Q. I read your article on how to be a good pension fund manager today and, in regard to moving your money from the Thrift Savings Plan after you retire, you left out the biggest obstacle to leaving it in: You cannot add another penny of contribution for the rest of your life. Also, in regard to better results outside of the TSP, would you say that if you can beat the market indexes, which TSP is based on, you can beat TSP. Join up with the American Association of Individual Investors, whose model portfolios have smoked the market averages…